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Market and Economic Analysis for a Proposed New Tennis Complex at Troy Park in Howard County, Maryland

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Market and Economic Analysis for a Proposed New Tennis Complex at Troy Park in Howard County, Maryland Market and Economic Analysis for a Proposed New Tennis Complex at Troy Park in Howard County, Maryland Final Report March 2012 4427 W. Kennedy Boulevard ∙ Suite 200 ∙ Tampa, Florida 33609 ∙ Phone 813.281.1222 ∙ Fax 813.315.6040 www.crossroads-fl.com Crossroads Consulting Services is a Limited Liability Company March 23, 2012 Mr. Gary McGuigan Project Executive Maryland Stadium Authority 333 W. Camden St., Suite 500 Baltimore, MD 21201 Dear Mr. McGuigan: Crossroads Consulting Services LLC (Crossroads Consulting) is pleased to present this market and economic analysis to the Maryland Stadium Authority (MSA) regarding a proposed new tennis complex at Troy Park in Howard County, Maryland (County). In accordance with our agreement, this report summarizes our research and analysis which is intended to assist the MSA and the County with their decisions regarding the potential development of the proposed new tennis complex. The information contained in the report is based on estimates, assumptions, and information developed from market research, industry knowledge, input from potential demand generators, as well as other factors including data provided by the MSA, the County, and other secondary sources. We have utilized sources that are deemed to be reliable but cannot guarantee their accuracy. All information provided to us by others was not audited or verified and was assumed to be correct. Because the procedures were limited, we express no opinion or assurances of any kind on the achievability of any projected information contained herein and this report should not be relied upon for that purpose. Furthermore, there will be differences between projected and actual results because events and circumstances frequently do not occur as expected, and those differences may be material. We have no responsibility to update this report for events and circumstances that occur after the date of this report. The accompanying report is restricted to internal use by the MSA and the County and may not be relied upon by any third party for any purpose including financing. Notwithstanding these limitations, it is understood that this document may be subject to public information laws and as such can be made available to the public upon request. Although you have authorized reports to be sent electronically for your convenience, only the final hard copy report should be viewed as our work product. We have enjoyed serving you on this engagement and look forward to providing you with continued service in the future. Sincerely, Crossroads Consulting Services LLC 4427 W. Kennedy Boulevard ∙ Suite 200 ∙ Tampa, Florida 33609 ∙ Phone 813.281.1222 ∙ Fax 813.315.6040 www.crossroads-fl.com Crossroads Consulting Services is a Limited Liability Company Table of Contents 1. Introduction and Executive Summary 1 2. Overview of Industry Trends 8 3. Market Analysis 21 4. Case Studies 51 5. Economic Analysis 64 1. Introduction and Executive Summary 1 Introduction and Executive Summary Introduction Howard County is centrally located in one of the nation’s largest and wealthiest metro areas. The County had the fifth highest median household income in the U.S. in 2009. Situated in the Baltimore- Washington Corridor, the County is accessible to interstates I-95 and I-70 and has a reputation as an ideal place to live, work, play and raise children. Howard County’s Columbia/Ellicott City area has been recognized by MONEY magazine as one of “America’s Best Places to Live” and by Forbes magazine and one of the “Best Places to Raise a Family”. Howard County has also been recognized as “Best Educated” (adults over 25) according to the U.S. Census Bureau. Relative to leisure activities, there are six regional parks, 24 community parks, seven golf courses, five lakes, and over 200 miles of walking, hiking, and biking trails. As Howard County’s population base continues to grow and diversify, its leadership continues to evaluate opportunities that best meet the community’s short and long-term needs. Relative to recreational facilities, Howard County has planned to build a regional park on a 106-acre site located near the intersection of Maryland Route 100 and Interstate 95 and allocated approximately $1.6 million in capital funding for predevelopment of the park. The park would be operated by the Howard County Recreation and Parks Department (HCRP) whose mission is to provide opportunities to pursue safe and enjoyable leisure activities in balance with the protection and conservation of natural resources. Studies have suggested that parks and recreation can have positive impacts on the physical, mental, and social health of individuals and their communities. Social benefits of recreation include strengthening communities, promoting social bonds, and supporting youth. In addition to offering an outlet for physical activity, parks can also provide qualitative and quantitative benefits to residents and municipal governments. For instance, research indicates that parks can have a positive impact on the value of nearby property. Many communities view recreation facilities as real estate assets that increase the overall quality of life for both residents and businesses. The original concept of developing a world-class tennis facility in Howard County was proposed by the Howard County Tennis Patrons, Inc. (HCTP), a nonprofit corporation formed in 2004 to promote the growth of tennis in Howard County. A primary objective of the HCTP is to create a premier tennis facility with a full menu of quality programming for children and adults and for hosting United States Tennis Association (USTA) events. The HCTP’s vision for the project was to create a “green” facility for residents of Howard County and surrounding communities that cultivates tennis, fitness, health, education, and a spirit of community, while bringing economic benefit to the County. As such, the Troy Park tennis complex was envisioned to be more than a place to play tennis. In many ways, the original concept mirrored that of a private, membership-based tennis club. The current program under consideration for the tennis complex includes 30 professional quality tennis courts (12 indoor and 18 outdoor), an 8,000-seat multi-use stadium, a community plaza and other associated amenities such as a pro shop. The indoor tennis court area could also be converted into 30,000 square feet of multi-purpose space. A membership health/fitness club is not assumed to be part of the tennis complex. 1. Introduction and Executive Summary 2 Site Location Map Program Map Representatives from HCTP have been working with various agencies for approximately five years to fulfill the group’s vision for a world-class tennis facility. During this time, HCTP allocated significant human and financial resources to the project including several study efforts. Development of the proposed tennis complex was anticipated to be a private-public partnership between the HCTP and the HCRP. To date, HCTP has not been able to secure the necessary private funding to design, develop and construct the project and, as such, recognizes that any future initiatives related to the proposed tennis complex will be led solely by the County. Prior to committing any public funds to this specific project and/or moving forward with the broader development of the Troy Regional Park, Howard County asked the MSA to conduct a market and economic study to assist in evaluating the merits of the proposed new tennis complex. County representatives indicated that their primary objectives for the proposed project are to accommodate the needs of local residents and attract out-of-town attendees that generate economic activity for area businesses. As such, Crossroads Consulting was retained to assess specific market and economic issues associated with developing and operating the proposed new tennis complex in Elkridge. This study is intended to serve as a resource for the County and the MSA to make its decisions going forward. The work plan included qualitative and quantitative analyses that focused on the unique attributes of Howard County, market supply relative to demand for the proposed new tennis complex, operating strategies, and project economics. Specific research tasks completed include, but were not limited to: • Reviewed previous studies related to the project to obtain a thorough background of the project. • Surveyed/interviewed stakeholders such as area governments and related agencies, educational institutions, the convention/visitor industry, the business community and others to obtain their input on the project. • Summarized historical and projected industry trends to provide perspective on the growth and changes in tennis as well as an overview of its participants and their preferences. 1. Introduction and Executive Summary 3 • Analyzed market attributes such as trends and projections in population, age distribution and income; employment base; accessibility; hotel supply; climate; and area facilities to assist in assessing the market in which the proposed facility would operate relative to potential usage. • Surveyed/interviewed representatives from area scholastic and collegiate programs; State, regional and national tennis organizations; event producers of various special athletic events; concert promoters; and others to assess potential demand for the proposed tennis complex and required program elements. • Analyzed data from a select number of competitive/comparable facilities to provide context for estimates of usage and operations. • Commented on the proposed tennis
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